Worth a read – SMF’s new paper on the economy

Think tanks are a bit like wines (work with me on this).    You’ve got the rich full Burgundy of the Adam Smith Institute,  the decent champagne of Policy Exchange and the strictly post lunch Tokaji of ResPublica.     Whereas I’d put the IPPR and Demos in the sweeter Pinot Gris camp, the SMF is definitely an uber dry Sauvignon Blanc – cuts through stodge like a knife, but quite tough to love at first sip.

I recommend you sit down with a full bottle of Chateau SMF this week and have a good read of their latest paper: Osborne’s Choice – combining fiscal credibility and growth. It’s a cracking read and makes you wish Ian Mulheirn was Chancellor.  Instead of publishing a massive tome his team has put together a readable, short, action-focused pamphlet which sets out some proper costed solutions to provide the additional £15 billion needed to fill the government’s fiscal hole.  Mulheirn reckons it’s critical that the government finds savings with a low impact on economic output and uses microeconomic policy to manage blockages in the UK household sector to boost consumption.

The Mulheirn plan would see tax relief on higher rate pension contributions halved, a cap on maximum ISA holdings, rolling Child Benefit into the tax credits system, cutting winter fuel payments for better off pensioners and (uh-oh) scrapping free bus travel for the over-60s.  The savings would be rolled into infrastructure capital spend.

Interesting plan.   There’s a bit of political pain in there, but everything identified would keep the show on the road and boost economic outputs.   SMF have been clever in getting people like the BBC’s Evan Davis,  Gavyn Davies and Sir Richard Lambert to draft responses to the paper, all calling for the SMF’s findings to be carefully considered by the coalition.

It’s great work by a think tank.  Quietly working on critical policy ideas, and providing much needed space for discussion.  All with a heady floral note and a hint of grapefruit.

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